India-US Bilateral Trade Agreement
Indian Economy
- PYQs6
- Articles1
Background
A Bilateral Trade Agreement with the US, India's largest trading partner, has significant implications for India's economic growth, export competitiveness, import costs, and specific sectors like agriculture and manufacturing. It reflects India's evolving trade policy and its strategic alignment in global economic affairs, impacting both domestic industries and international relations.
Bilateral Trade Agreements (BTAs) are formal pacts between two countries designed to reduce or eliminate trade barriers like tariffs and quotas, thereby facilitating increased trade and economic cooperation. These agreements aim to provide preferential market access, streamline customs procedures, and establish mechanisms for dispute resolution, fostering deeper economic integration between the signatory nations.
Facts & tables
- Negotiation Status
- In 'final steps', with only the last 1% of negotiations remaining.
- Negotiation Duration
- Ongoing for nearly 18 months.
- Expected Outcome
- Anticipated to be beneficial for both the United States and India.
- Driving Force
- High-level political engagement and personal equations between leaders.
| Type | Reference |
|---|---|
| Conceptual area | International Trade |
| Conceptual area | Economic Diplomacy |
| Body | Role |
|---|---|
| Ministry of Commerce and Industry (India) | Negotiates |
| Office of the United States Trade Representative (USTR) | Negotiates |
Prelims angle
Prelims angle: Factual recall
Prelims angle: Terminology-based question
- Aims to reduce tariffs and non-tariff barriers.
- Negotiations in final 1% after 18 months.
- Expected to boost bilateral trade and investment.
- Impacts various sectors, including agriculture.
- Reflects strategic economic partnership.
| Year | Framing tags |
|---|---|
| 2020 | Multi-statement analysis, Factual recall |
| 2019 | Factual recall |
| 2019 | Factual recall, Conceptual understanding |
| 2017 | Factual recall, Terminology-based question |
| 2017 | Multi-statement analysis, Factual recall |
| 2016 | Multi-statement analysis, Conceptual understanding |
Timeline
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International Trade
Conceptual area
-
Economic Diplomacy
Conceptual area
-
Prelims 2016
Multi-statement analysis, Conceptual understanding
-
Prelims 2017
Factual recall, Terminology-based question
-
Prelims 2017
Multi-statement analysis, Factual recall
-
Prelims 2019
Factual recall
-
Prelims 2019
Factual recall, Conceptual understanding
-
Prelims 2020
Multi-statement analysis, Factual recall
-
US, India trade deal in final steps: Sergio Gor
The India-US BTA is a crucial policy instrument aimed at deepening economic ties by reducing trade barriers, currently in its final negotiation stages after 18 months of talks.
See also
Past papers
2017–2020 · 3 questions
In the news
US, India trade deal in final steps: Sergio Gor
The India-US BTA is a crucial policy instrument aimed at deepening economic ties by reducing trade barriers, currently in its final negotiation stages after 18 months of talks.
Try these PYQs
Broad-based Trade and Investment Agreement (BTIA)’ is sometimes seen in the news in the context of negotiations held between India and
The Broad-based Trade and Investment Agreement (BTIA) is negotiated between India and the European Union (EU).
Consider the following statements:
1. India has ratified the Trade Facilitation Agreement (TFA) of WTO.
2. TFA is a part of WTO’s Bali Ministerial Package of 2013.
3. TFA came into force in January 2016.
Which of the statements given above is/are correct?
The trade facilitation decision is a multilateral deal to simplify customs procedures by reducing costs and improving their speed and efficiency. Statement 1 is correct. India has ratified the Trade Facilitation Agreement (TFA) of the WTO. This signifies India's official acceptance and implementation of the agreement's provisions. Statement 2 is correct. The TFA is indeed a part of the WTO's Bali Ministerial Package of 2013. This package refers to a collection of agreements reached during the Ninth Ministerial Conference of the World Trade Organization in Bali, Indonesia. The TFA was a landmark achievement within this package. Statement 3 is incorrect. The Trade Facilitation Agreement (TFA) came into force in February 2017, not January 2016. It required ratification by two-thirds of WTO members before taking effect.
Consider the following statements:
1. The value of Indo-Sri Lanka trade has consistently increased in the last decade.
2. “Textile and textile articles” constitute an important item of trade between India and Bangladesh.
3. In the last five years, Nepal has been the largest trading partner of India in South Asia.
Which of the statements given above is/are correct?
Statement 1 is not correct. Bilateral trade between India and Sri Lanka has increased by around 9 times between 2000-01 and 2018-19. Total trade between the two countries was US$ 6.2 billion in 2018-19, out of which India's exports to Sri Lanka were US$ 4.7 billion and imports were US$ 1.5 billion. Although India has always had a trade surplus with Sri Lanka, the gap has widened since 2008-09. In 2012-13 and 2016-17, the trade slumped, thus disturbing the steady increase in the graph. Statement 2 is correct. According to the World Bank, India exports $2.25 billion worth of textile and clothing products to Bangladesh. In turn, it imports $336 million worth of textile and clothing products from Dhaka. Statement 3 is not correct. Bangladesh is India's biggest trade partner in South Asia. Bilateral trade between India and Bangladesh has grown steadily over the last decade. India's exports to Bangladesh in FY 2018-19 stood at $9.21 billion and imports during the same period were at $1.04 billion.
With reference to the ‘Trans-Pacific Partnership’, consider the following statements:
1. It is an agreement among all the Pacific Rim countries except China and Russia.
2. It is a strategic alliance for the purpose of maritime security only.
Which of the statements given above is/are correct?
Statement 1 is Incorrect: While China and Russia were not part of the TPP negotiations, it wasn't solely focused on Pacific Rim countries. Other economies like Vietnam and Singapore were part of the TPP despite not exactly being on the Pacific Rim. Statement 2 is Incorrect: The TPP was a proposed trade agreement, not a strategic alliance for maritime security. It aimed to reduce trade barriers and promote economic integration among member countries. The TPP negotiations were concluded in 2015, but the agreement was never ratified by all the signatories. The United States withdrew from the TPP in 2017, effectively ending the initiative in its original form. However, some member countries pursued alternative trade agreements based on the TPP framework. Hence, option D is the correct answer.
Among the following, which one is the largest exporter of rice in the world in the last five years?
India overtook Thailand as the world's largest riceexporter in 2015, since then India is held its position while China is the largest producer of rice. Below are the few countries that exported the highest dollar value worth of rice in 2018.
1) India US$7.4 billion (30.1% of total rice exports)
2) Thailand $5.6 billion (22.7%)
3) Vietnam $2.2 billion (9%)
Show 1 more PYQs
Among the agricultural commodities imported by India, which one of the following accounts for the highest imports in terms of value in the last five years?
* The country's vegetable oil imports for the first six months of the oil year during November 2018 to April 2019 stood at 75,41,689 tonne, up about 3% from 73,18,295 tonne reported in the same period last year. * Vegetable oils account for the highest import in terms of value in the last five years. India relies on imports for 70 percent of its edible oil consumption.